Digital Accounting for VAT registered businesses

What you need to know to be ready for digital tax

Making Tax Digital (MTD) for VAT was first introduced in April 2019 meaning VAT registered businesses must keep records digitally and file returns via HMRC compatible software. Using software will positively impact the day to day running of your business as well as fulfilling your requirements with HMRC

What even is Making Tax Digital?

MTD is a government initiative that requires business owners and individuals to keep digital accounting records and file their taxes via an HMRC approved digital software.

Why digital accounting is important for VAT registered businesses

Some say MTD is “the death of the tax return” but for now that’s not the case. For us, the initiative simply highlights the importance of maintaining digital records and submitting HMRC returns via compatible software. This initiative will positively impact the day-to-day running of your business and make your life easier. Here is more about the benefits of digital accounting for you. 

How does this affect me?

There’s no doubt that MTD is set to be the biggest change to taxation in a generation. With all the confusion out there, our highlights of what MTD means for you are:

Digital records

Making Tax Digital means you will now
need to store digital records in compatible software like Xero.

Multiple returns per year

The frequency which VAT returns need to be filed with HMRC has not changed and for most businesses this tends to be quarterly.

A seamless experience

If you’re using MTD ready software, everything will be right at your fingertips and available at the push of the button. We like the sound of that!

Getting set up with MTD-friendly software is the key

There are a number of MTD-compliant accounting software packages and some relatively cheap solutions specifically designed for filing VAT returns. For a number of years we have recommended using Xero and Dext as we feel it is the best accounting solution available to small business owners.

We'll be here to help

Getting setting up correctly on Xero is imperative, not only to comply with HMRC but to enable you to have meaningful financial information. If you have bookkeeping or accounting experience you may be able to handle things yourself. Don’t worry if you haven’t as we can take the record keeping and filing off your hands freeing your time to run and grow your business.

How can Tyrrell Accountants help you get there?

Software

We'll just provide the software for you, but you'll run it going forward. 

Full Service

If you're uncomfortable using the software, we'll do everything for you. 

The plan

Determine the right software for you.

Determine the level of support you need

Go digital and be confident your finances are up-to-date

We were comfortable with the systems we were using and a little apprehensive about moving across to new software. Tyrrell Accountants supported us throughout the whole process which made for a smooth, straight forward transition. Digitalisation and the move to Xero has improved the accounting function of the business and a change that we are glad we made.

- Andy Wright – Director, Impington Roofing Services Ltd

Here are the solutions we recommend

Dext automates the process of saving receipts and invoices. 

If you don’t have a dedicated business account, this is for you

Probably most relevant for larger businesses

Current information about Making Tax Digital

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